1
Fair Work Act 2009
s.611 - Appeal of decisions
E. Church
v
Eastern Health t/as Eastern Health Great Health and Wellbeing
(C2013/7477)
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
COMMISSIONER WILSON
MELBOURNE, 4 FEBRUARY 2014
S.611 - Application for costs in relation to an appeal application - meaning of ‘vexatiously
and without reasonable cause’ - appeal application had limited prospects of success but not
persuaded that it could be characterised as being made without reasonable cause - satisfied
that the appeal application was made vexatiously for improper collateral purpose of delaying
the first instance hearing - discretion exercised and costs ordered.
Introduction
[1] Eastern Health seeks an order for costs under s.611(2)(a) of the Fair Work Act 2009
(Cth) (the FW Act) for the payment of its costs incurred in relation to an appeal filed by
Elizabeth Church (the Appellant) on 2 December 2013. The appeal was made against a
decision of Commissioner Roe, granting permission for Eastern Health to be represented by a
lawyer at the hearing of Ms Church’s unfair dismissal application. At all relevant times Ms
Church was represented by Nathan Murphy, an Industrial Officer with the Health Services
Union Victoria No. 1 Branch (the HSU). The appeal was withdrawn about an hour before its
hearing was scheduled to commence. Eastern Health contends that the appeal was made
vexatiously and without reasonable cause.
Background
[2] It is necessary that we set out, in some detail, the background to this application.
[3] Ms Church was dismissed from her employment with Eastern Health on 5 April 2013
and filed an application for unfair dismissal remedy under s.394 of the FW Act on 13 May
2013. Conciliation was unsuccessful and the matter was listed for a two day arbitration
hearing, commencing on 2 December 2013.
[4] On 15 November 2013 Eastern Health filed a submission in support of its application
to be represented at the hearing. The Appellant objected to that application in the following
terms:
[2014] FWCFB 810
DECISION
E AUSTRALIA FairWork Commission
[2014] FWCFB 810
2
“The Applicant submits that the criteria justifying legal representation for the Respondent has
not been met as set out in 596(2).
The Applicant also notes recent decisions of g & s Fortunato Group Pty Ltd v J. Stranieri
[2013] FWCFB 4098 (26 June 2013), Azzopardi v Serco Sodexo Defence Services Pty Limited
[2013] FWC 3405 (29 May 2013) in supporting its objection.”
[5] On 25 November 2013 Commissioner Roe advised both parties that he had decided to
grant Eastern Health’s application to be represented by a lawyer. The Commissioner’s
decision was subsequently published (see [2013] FWC 9443).
[6] The first day of the two day arbitration was scheduled to commence at 10:00 am on 2
December 2013. At 9:24 am that morning the Appellant lodged a Notice of Appeal pursuant
to s.604 of the FW Act, in respect of the Commissioner’s decision to grant permission for the
respondent to be represented by a lawyer in the arbitration. In the covering email to the
Commissioner’s chambers, Mr Murphy stated:
“The Applicant has filed a notice of Appeal in relation to the matter of representation. The
Applicant has requested a stay of decision, and therefore expects the matter listed for Dec 2
and 3 to be adjourned.”
[7] The hearing before Commissioner Roe was subsequently adjourned, when neither the
applicant nor Mr Murphy appeared and could not be contacted.
[8] The Notice of Appeal set out the following grounds and the basis on which it was
submitted that permission to appeal should be granted:
“ 2. Grounds
(i) Commissioner Roe has allowed representation due to the ‘complexity of the matter’.
(ii) The applicant submits that the 596 (2) (c) carries more weight than 596 (2) (a) and
therefore representation should not be granted;
(iii) The Applicant submits that the complexity involved goes to jurisdiction the Respondent
should only be represented in relation to jurisdiction only.
3. Public interest in permitting the appeal
It is in the public interest to define which carries greater weight 596 (a), (b), or (c).”
[9] On 2 December 2013, a Notice of Listing was sent to the parties, listing the appeal for
hearing before a Full Bench at 10:00 am on 9 December 2013. A further Notice of Listing
was sent to the parties at 11:49 am on 5 December 2013, advising that the matter was listed
for a Telephone Mention the following morning, Friday 6 December at 9:00 am.
Representatives for both the Appellant and the Respondent were contacted by phone to
confirm the listings, appearances and telephone contact numbers. The Appellant’s
representative could not be contacted and so messages were left on his mobile phone and with
the HSU office staff.
[10] At 9:02 am on 6 December 2013, following a number of unsuccessful attempts to
contact Mr Murphy, the mention commenced in the absence of the Appellant or her
[2014] FWCFB 810
3
representative. During the mention it was confirmed that the Full Bench did not require the
Appellant to file an appeal book, but would require both parties to prepare an outline of
submissions, which were to be handed up at the commencement of the hearing on 9
December 2013. An expedited copy of the transcript was ordered and subsequently provided
to Mr Murphy at 11:25 am on Friday 6 December 2013.
[11] The Appellant seeks to excuse her non-attendance at the mention on 6 December 2013
on the basis that Mr Murphy was interstate, on leave, on 5 and 6 December 2013. Such an
explanation ignores the fact that the HSU was provided with a Notice of Listing in respect of
the listing and telephone contact was made with the Union offices. No explanation is provided
for the Union’s failure to send an alternate representative or to seek an adjournment of the
mention to a later time.
[12] The hearing of the appeal was scheduled to commence at 10:00 am on Monday 9
December 2013. At 8:42 am that day the Appellant filed a Notice of Discontinuance, wholly
discontinuing the appeal. The Respondent attended the Commission but was advised that the
hearing was cancelled as the matter had been discontinued.
[13] Ms Church’s unfair dismissal proceeding was then listed for hearing before
Commissioner Roe at 10:00 am on 16 December 2013. At 8.01 am on 16 December 2013 Mr
Murphy advised the Commissioner that Ms Church was discontinuing her unfair dismissal
application and a Notice of Discontinuance was filed at 9:11 am.
[14] In a decision issued on 18 December 2013 Commissioner Roe made an order under
s.400A of the FW Act that Ms Church pay the costs of the attendance of the representatives of
Eastern Health at the proceedings on 2 December 2013 and incidental costs, including those
associated with the making of the costs application. The essence of the Commissioner’s
decision is set out at paragraphs [18] to [21]:
“[18] The matters complained of are in connection with the conduct or continuation of the
matter. I must be satisfied that the HSU as the representative of the Applicant has caused costs
to be incurred because of an unreasonable act or omission.
[19] I am satisfied that there was no basis for the Applicant not to attend the hearing on 2
December 2013. The Applicant was represented by an experienced union official, Mr Murphy,
who was well aware of the directions to attend the hearing, well aware that no stay order had
been or could have been issued and well aware that the lack of notice of the appeal meant that
the Commission and the Respondent would almost certainly have been unaware of the appeal
and would have been in attendance at the hearing. I am also satisfied that Mr Murphy for the
Applicant was aware that the Commission had made a number of attempts to contact him to
advise him that the matter was proceeding and that he failed to respond prior to 16 December
2013 to the messages left for him. I am satisfied that these matters were unreasonable actions
and acts of omission and constituted an unreasonable failure to attend proceedings and
constituted an unreasonable failure to comply with directions of the Commission.
[20] I am also satisfied in the unusual circumstances of this matter that the failure to lodge the
appeal until 36 minutes prior to the scheduled hearing when combined with the failure to make
any other attempts to provide advice or warning by telephone constitutes unprofessional and
unreasonable behaviour by Mr Murphy on behalf of the Applicant. It should be noted that the
procedural decision to grant representation was issued a week prior to the scheduled hearing in
order to assist the parties. If Mr Murphy on behalf of the Applicant wished to appeal that
procedural decision he had plenty of time to do so long before the proceedings and had he
[2014] FWCFB 810
4
done so the costs for 2 December 2013 would not have been incurred as a decision in respect
to his application for a stay order would almost certainly have been made prior to the
scheduled hearing.
[21] I am satisfied that the costs of the attendance by Eastern Health and its representatives on
2 December 2013 were incurred unnecessarily and because of the unreasonable behaviour.
The matter was relisted for hearing on 16 December 2013 as a consequence.”1
[15] While the costs order was made against Ms Church the Commissioner made it clear
that it was Mr Murphy’s conduct which was in issue. At para [24] of his decision the
Commissioner said:
“The unreasonable conduct was unreasonable conduct by Mr Murphy as the representative of
the Applicant so I hope that the HSU will take responsibility.”
[16] We now turn to the application before us. At the outset it is important to appreciate
that the Commission, as a statutory tribunal, has no inherent power to make costs orders. Its
powers to make such orders must be derived from the FW Act. Depending on the
circumstances the Commission can order costs under ss 376, 400A, 401 611 and 780 of the
FW Act. The scope of these provisions and the circumstances in which they operate vary.
[17] Section 376 deals with costs orders against lawyers and paid agents in relation to
general protections applications made under ss 365 or 372. Section 780 is in similar terms and
applies to applications under s.773 for the Commission to deal with a dispute alleging that the
employer has terminated an employees’ employment in contravention of s.772.
[18] Section 400A provides that the Commission may make a costs order against a party to
a matter arising under Part 3-2, if satisfied that the first party caused those costs to be incurred
because of their unreasonable act or omission in connection with the conduct or continuation
of the matter. Part 3-2 of the FW Act deals with ‘Unfair Dismissal’. Section 401 deals with
costs orders against lawyers and paid agents in relation to applications for an unfair dismissal
remedy under s.394.
[19] The costs application before us arises from an appeal under s.604 of the FW Act. No
party contended that ss 376, 400A, 401 or 780 had any application in the present
circumstances and, on their face, they do not. The costs application is brought under
s.611(2)(a).
[20] Section 611 of the FW Act provides as follows:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of the costs of
another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person
responded to the application, vexatiously or without reasonable cause; or
1 [2013] FWC 9970
[2014] FWCFB 810
5
(b) the FWC is satisfied that it should have been reasonably apparent to the first
person that the first person’s application, or the first person’s response to the
application, had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780.
(3) A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1).”
[21] Ascertaining the meaning of s.611 necessarily begins with the ordinary and
grammatical meaning of the words used.2 These words must be read in context by reference to
the language of the Act as a whole and to the legislative purpose.3
[22] There are some similarities between s.611 and s.570 of the FW Act. Section 570 deals
with the circumstances in which a party to proceedings in a court in relation to a matter
arising under the FW Act may be ordered to pay costs incurred by another party to the
proceedings. Section 570 states:
“570 Costs only if proceedings instituted vexatiously etc.
(1) A party to proceedings (including an appeal) in a court (including a court of a State or
Territory) in relation to a matter arising under this Act may be ordered by the court to pay
costs incurred by another party to the proceedings only in accordance with subsection (2) or
section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or
Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without
reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to
incur the costs; or
(c) the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.”
[23] Given the similarities between ss 611 and 570, in particular the common use of the
expression ‘vexatiously or without reasonable cause’, judgements which have construed s.570
and its legislative antecedents are relevant to our consideration of s.611.
[24] In Heidt v Chrysler Australia Ltd4 Northrop J said of s.197A of the Conciliation and
Arbitration Act 1904 (Cth), a predecessor provision to s.570 of the FW Act;
2 Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1 at [26]
3 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at paragraph [69]
[2014] FWCFB 810
6
“The policy of s.197A of the Act is clear. It is designed to free parties from the risk of having
to pay the costs of an opposing party. At the same time the section provides a protection to
parties, defending proceedings which have been instituted vexatiously or without reasonable
cause. This protection is in the form of conferring a power in the court to order costs against a
party who, in substance, institutes proceedings which in other jurisdictions may constitute an
abuse of the process of a court.”
[25] The application of these observations to the construction of s.611 requires some
qualification. Section 570 deals with the ordering of costs in court proceedings in relation to
matters arising under the FW Act. In court proceedings the usual practice is that an order for
costs follows the outcome of the substantive proceedings. As we have mentioned the
Commission context is different. The Commission’s power to order costs only arises in the
context of ss.376, 400A, 401, 611 and 780 of the FW Act. There is no general practice of cost
following the event. Despite these differences the observations of Northrop J in Heidt are
apposite to s.611.
[26] Section 611 sets out a general rule - that a person must bear their own costs in relation
to a matter before the Commission (s.611(1)) - and then provides an exception to that general
rule in certain limited circumstances. The Explanatory Memorandum confirms this
interpretation of the section, it is in the following terms:
2353. Subclause 611(1) provides that generally a person must bear their own costs in
relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in certain
limited circumstances. FWA may order a person to bear some or all of the costs of
another person where FWA is satisfied that the person made an application
vexatiously or without reasonable cause or the application or response to an
application had no reasonable prospects of success.
2355. A note following subclause (2) alerts the reader that FWA also has the power
to order costs against lawyers and paid agents under clauses 376, 401 and 780 which
deal with termination and unfair dismissal matters.
2356. Subclause 611(3) provides that a person to whom a costs order applies must
not contravene a term of the order.
[27] In the context of s.570 and its legislative antecedents courts have observed that an
applicant who has the benefit of the protection of a provision such as s.570(1), (ie the general
rule that parties bear their own costs), will only rarely be ordered to pay costs5 and that the
power should be exercised with caution and only in a clear case6. In our view a similarly
cautious approach is to be taken to the exercise of the Commissions powers in s.611 of the
FW Act.
4 (1976) 26 FLR 257 at 272. Cited with approval in Re Ross and others; Ex parte Crozier (2001) 111 IR 282 at [10] per Gray,
Branson and Kenny JJ and applied in the context of s.347 of the Workplace Relations Act 1996 (Cth)
5 Thompson v Hodder (1989) 21 FCR 467 at 470; Hatchett v Bowater Tutt Industries Pty Ltd (1991) 28 FCR 324 at 325; Re
Ross and others; Ex parte Crozier (2001) 111 IR 282 at [11]
6 CFMEU v Clark (2008) 170 FCR 574 at [29]; Saxena v PPF Asset Management Ltd [2011] FCA 395 at [4]
[2014] FWCFB 810
7
[28] We now turn to the exceptions to the general rule expressed in s.611(1) and the
meaning of the expression ‘vexatiously or without reasonable cause’.
[29] The question of whether an application was made ‘vexatiously’ looks to the motive of
the applicant in making the application. It is an alternative ground to the ground that the
application was made ‘without reasonable cause’ and may apply where there is a reasonable
basis for making the application. In Nilsen v Loyal Orange Trust 7 (Nilsen) North J observed that
this context requires the concept of vexatiousness to be narrowly construed. His Honour went on
to state that an application will be made vexatiously ‘where the predominant purpose ....is to
harass or embarrass the other party, or to gain a collateral advantage’.8 Deane and Gaudron JJ
made a similar observation in Hamilton v Oades9 in which they said:
“The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which
justify the exercise of the power to control proceedings to prevent injustice, those terms
respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously
or unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified
trouble and harassment’.”
[30] We now turn to the expression ‘without reasonable cause’. A party cannot be said to
have made an application ‘without reasonable cause’, within the meaning of s.611(2)(a),
simply because his or her argument proves unsuccessful.10 The test is not whether the
application might have been successful, but whether the application should not have been
made.11 In Kanan v Australian Postal and Telecommunications Union.12, Wilcox J put it this
way:
“It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable
cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the
proceeding, there was no substantial prospect of success. If success depends upon the
resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to
stigmatise the proceeding as being ‘without reasonable cause’. But where, on the applicant’s
own version of the facts, it is clear that the proceeding must fail, it may properly be said that
the proceeding lacks a reasonable cause.”
[31] In the context of an appeal the question becomes whether, having regard to the
arguments available to the appellant at the time of instituting the appeal, there was no
substantial prospect of success. As Wilcox CJ (with whom Madgwick J agreed) observed in
Imogen Pty Ltd v Sangwin:13
“The prospect must be evaluated in the light of the facts of the case, the judgment appealed
from and the points taken in the notice of appeal. If having regard to those matters, there was
not insubstantial prospect of the appeal achieving some success, albeit not necessarily
complete success, then it would seem to me it cannot be fairly described as having been
7 [1997] 76 IR 180 at 181
8 Also see Attorney -General v Wentworth (1988) 14 NSWLR 481 at 491
9 (1989) 166 CLR 486 at 502
10 R v Moore; Ex Parte Miscellaneous Workers Union of Australia (1978) 140 CLR 470 at 473; Nilsen v Loyal Orange Trust
(1997) 76 IR 180 at 181 per North J
11 J-Corp Pty Limited v Australian Builders Labourers Federated Union of Workers (WA Branch) (1993) 46 IR 301 per
French J
12 (1992) 43 IR 257
13 (1996) 70 IR 254
[2014] FWCFB 810
8
instituted ‘without reasonable cause’. This is so even if, in the result, the appeal proved
unsuccessful.”14
[32] In the same matter Ryan J said:
“The existence of ‘‘reasonable cause’’ within the meaning of s 347 falls to be determined at
the time when the relevant proceedings were instituted. The fact that the party instituting the
proceedings later discontinues them is therefore not a matter to be taken directly into account
in the application of the section. However, an appeal stands in somewhat different case from
proceedings at first instance in that discontinuance may bear indirectly on the discretion
conferred by s 347 by tending to confirm an impression derived from the grounds of appeal
and the reasons for judgment below that the prospects of success on the appeal were slight.
Not without significance to an assessment of the reasonableness of the institution of an appeal
are the amount at issue and the nature of the points raised by the notice of appeal. Where, as
here, the appeal is essentially against findings of fact made by the trial judge after a two day
hearing resulting in a judgment for $16,900 and raises no important or distinctive point of law
or principle, the Court may more readily conclude that it was not reasonable in the
circumstances to have instituted it. On a fairly fine balance of the relevant considerations and
not without hesitation, I have been led to reach that conclusion in this case and agree with the
Chief Justice and the orders which he has proposed.”15
[33] In construing s.570 and its legislative antecedents courts have observed that the test
imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary
judgement, that is ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly
groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’16.
[34] We now turn to the application before us.
[35] Eastern Health submits that the appeal application was made both vexatiously and
without reasonable cause. It is convenient to first deal with the second limb of the cost
application.
[36] The appeal is directed at the Commissioner’s exercise of discretion under s.596. The
grounds of appeal contend that ‘s.596(2)(c) carries more weight than s.596(2)(a) and therefore
representation should not be granted’. It is difficult to discern the precise point being
advanced and it appears to proceed on the erroneous assumption that the factors set out in
paragraphs 596(2)(a) to (c) are competing considerations.
[37] Subsection 596(2) of the FW Act provides that the Commission may grant permission
for a person to be represented by a lawyer or paid agent in a matter only if one or more of the
requirements in paragraphs 596(2)(a)(b) or (c) are met. Even if one or more of these
requirements is satisfied that does not dictate that the discretion should automatically be
exercised in favour of granting permission to appear.17 Subsection 596(2) states:
14 Ibid at 257
15 Ibid at 261-262
16 Heidt v Chrysler Australia Limited (1976) 26 FLR 257 at [272 - 273]; Geneff v Peterson (1986) 19 IR 40 at [87-88];
Hatchett v Bowater Tutt Industries Pty Ltd (1991) 28 FCR 324 at at 327; Re Ross and others, Ex Parte Crozier (2001)
111 IR 282 at [12]; Re Australian Education Union (NT Branch) (No.2) [2011] FCA 728 at [30]. Also see Wright v
Australian Customs Service, PR 926115, 23 December 2002 per Giudice J, Williams SDP and Foggo C
17 Warrell v Fair Work Australia [2013] FCA 291 (4 April 201) per Flick J at [24].
[2014] FWCFB 810
9
“(2) FWC may grant permission for a person to be represented by a lawyer or paid
agent in a matter before FWC only if:
(a) it would enable the matter to be dealt with more efficiently, taking into
account the complexity of the matter; or
(b) it would be unfair not to allow the person to be represented because the
person is unable to represent himself, herself or itself effectively; or
(c) it would be unfair not to allow the person to be represented taking into
account fairness between the person and other persons in the same matter.”
[38] The matters in s.596(2)(a), (b) and (c) set out the three, separate, bases upon which the
discretion to grant permission for a person to be represented by a lawyer or paid agent is
enlivened. So much is clear from the use of the disjunctive ‘or’ in s.596(2). It is sufficient to
enliven the discretion that the Commission is satisfied as to any one of the matters in
s.596(2)(a), (b) and (c). There is no requirement to weigh these matters one against the other.
On that basis the proposition that s.596(c) ‘carries more weight’ than s.596(a), seems unlikely
to be successful. However, as we have not had the benefit of argument on the point we do not
wish to express a concluded view.
[39] The second ground of appeal is that permission to be represented should have been
confined to those aspects of the proceeding that related to jurisdictional issues, on the basis
that only those issues had the requisite level of complexity. The Commission’s power under
s.596 to confine the grant of permission to be represented in the manner contended by the
Appellant has not been the subject of consideration by a Full Bench and we are not persuaded
that it can be characterised as being made ‘without reasonable cause’. However we note that
the failure of the Appellant to advance this point at first instance would tell against the grant
of permission to appeal in relation to this ground of appeal.
[40] While the appeal application can be fairly characterised as having limited prospects of
success we are not persuaded that the appeal application was made without reasonable cause.
It follows that this limb of the costs application fails. We now turn to the question of whether
the appeal application was made vexatiously.
[41] As we have mentioned, the question of whether an application was made vexatiously
turns on the motive of the applicant in making the application. Motive can be inferred from,
among other things, the surrounding circumstances, the applicants conduct and the merits of
the application itself.
[42] We have earlier set out the background to this application (see particularly paragraphs
[3] to [12]. On the facts of this case we have concluded that the appeal application was made
vexatiously. It was made for the improper collateral purpose of delaying the first instance
hearing. We draw such an inference from the fact that the appeal application was filed shortly
before the first instance unfair dismissal arbitration was scheduled to commence -
necessitating the adjournment of that proceeding; the Appellant’s failure to attend the
telephone mention on 6 December 2013; and the filing of the Form F50 Notice of
Discontinuance at 8.42 am on the morning of the appeal hearing. We note that the Appellant
could, and should, have attended the notified first instance hearing even though it had lodged
an Appeal against the Commissioner’s decision in relation to representation. We have also
had regard to the fact that the appeal application itself had limited prospects of success.
[2014] FWCFB 810
10
[43] Having concluded that the appeal application was made vexatiously our discretion to
order costs against the Appellant is enlivened. We have decided to exercise the discretion and
to make an order for costs. The terms of s.611 only permit the making of costs orders against
a party, not their representative. In the circumstances of this case the fault clearly lies with the
Appellant’s representative and accordingly we would expect the HSU to meet its obligations
to Ms Church and to pay the costs on her behalf.
[44] We order that the Appellant pay Eastern Health’s costs on a party-party basis, in
respect of the appeal application. The parties are to confer as to the terms of the order and file
a draft order within 7 days. Vice President Hatcher will settle the terms of our order.
PRESIDENT
Final written submissions:
24 January 2014
Printed by authority of the Commonwealth Government Printer
Price code C, PR547385
